Wealthfront: Factor based "Advanced Indexing"

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
bzargarcia
Posts: 70
Joined: Sat Jul 07, 2007 10:40 am
Location: San Antonio, Texas

Wealthfront: Factor based "Advanced Indexing"

Post by bzargarcia » Thu Jun 15, 2017 8:51 pm

Looks like Wealthfront is making some very big changes....

https://research.wealthfront.com/whitep ... -indexing/

Enjoy....

Bart
Bart Garcia

freyj6
Posts: 204
Joined: Thu Jun 19, 2014 2:09 am

Re: Wealthfront: Factor based "Advanced Indexing"

Post by freyj6 » Thu Jun 15, 2017 11:29 pm

It's starting to feel more and more like Wealthfront is just creating their own mutual fund.

How is this different from just investing in a multifactor fund?

David Scubadiver
Posts: 522
Joined: Thu Mar 24, 2016 8:40 am

Re: Wealthfront: Factor based "Advanced Indexing"

Post by David Scubadiver » Thu Oct 05, 2017 1:12 pm

The difference is that when you own a mutual fund they are not tax loss harvesting with respect to every one of its investments. There opportunity to harvest 500 or 1000 stocks for losses on a regular basis generates a lot of losses.

ofckrupke
Posts: 283
Joined: Mon Jan 10, 2011 2:26 pm

Re: Wealthfront: Factor based "Advanced Indexing"

Post by ofckrupke » Thu Oct 05, 2017 3:30 pm

freyj6 wrote:
Thu Jun 15, 2017 11:29 pm
How is this different from just investing in a multifactor fund?
A mutual fund can't pass net realized capital losses annually to shareholders, to offset same-year gains from their other assets, or (usually better) offset their other income up to $3k per MFJ tax unit, or be carried over to subsequent years for such purpose. You have to sell fund shares, representing the whole basket of stocks, to realize a loss - which is less typically available at the whole-basket level.

Post Reply